California Insurance Commissioner Jones Calls on Medical Malpractice Insurers to Reduce Rates
February 22, 2011
side note: Uh-oh! Is the Commissioner cracking the whip on out-of-control medical professional liability insurance rates? Or is he off-base, and rates are where they should be in California?
Insurance Commissioner Dave Jones today contacted several medical malpractice insurers raising concerns about excessive rates and asking that they make a rate filing with the California Department of Insurance (CDI) to reduce their rates.
"Unlike health insurance, where I do not have the authority to reject excessive rates, the Insurance Commissioner does have the authority to regulate the rates of medical malpractice insurance paid for by doctors, surgeons, clinics and other health providers," Commissioner Jones said. "We have found that recent loss ratios - the percentage of every premium dollar the insurer spends on claims - of many medical malpractice insurers are low, and that's why I have directed my staff to carefully examine the rates of medical malpractice insurers. Low loss ratios are one indication that premiums may be too high."
The authority to regulate medical malpractice insurance rates comes from provisions of law put into place by Proposition 103 in 1988. The Proposition 103 provisions include a mandate that insurers apply to the Insurance Commissioner for prior approval of rates and prohibit the use of excessive rates. Historically, this authority has been used to reduce medical malpractice rate increases and in some cases to require additional decreases in medical malpractice rates. The success CDI has had with regulating medical malpractice rates is another example of the benefits of strict rate regulation requirements. The provisions of Proposition 103 apply to most property-casualty coverages including personal auto and homeowners but do not apply to health insurance rates.
For those medical malpractice insurers where CDI has reason to believe the rates are excessive, the insurer will be required to make a rate filing with the Department, after which, the Department will conduct a review to evaluate the filing and approve a rate level that complies with the law.
North Carolina Lawmakers Debate Medical Malpractice Award Cap
February 17, 2011
side note: On the heels of Wisconsin, here's another new republican majority working to further the tortreform agenda. Should be an interesting process to watch.
North Carolina lawmakers have begun what promises to be a long fight over medical malpractice laws as insurance and medical services companies square off against law firms.
A Senate committee opened discussions Tuesday on legislation that includes limiting damages for pain and suffering to $250,000.
Courts in other states have found such limits to be illegal. Georgia’s Supreme Court ruled unanimously last year that a $350,000 cap on non-economic damages was unconstitutional.
A bill signed into law in 2007 capped monetary damages in negligence cases at $1 million, but only for those who agreed to go to binding arbitration. Few people have taken advantage of the option.
President Obama Starts Drive For Medical Malpractice Reforms
February 16, 2011
side note: No shocker here. None of the $250 million can be used for implementing damage caps (like the Republican HEALTH Act seeks), but the President is in favor of states implementing ideas like health courts.
WASHINGTON (AP) - Putting his own stamp on a long-standing Republican priority, President Barack Obama is launching a drive to overhaul state medical malpractice laws and cut down on wasteful tests doctors perform because they fear lawsuits.
Obama's budget calls for $250 million in Justice Department grants to help states rewrite their malpractice laws in line with recommendations that his bipartisan debt reduction commission issued last year.
"I think the president is very serious about following up on this," Health and Human Services Secretary Kathleen Sebelius told the Senate Finance Committee on Tuesday. Her agency would advise the Justice Department on awarding the grants.
Specific reforms the money could be used for exclude caps on jury awards that the American Medical Association and GOP lawmakers have pursued for years without success. But they do include measures unacceptable to trial lawyers, an interest group that contributes heavily to Democratic candidates.
Topping the list of ideas in an Obama administration summary of the proposal are health courts. Specially trained judges — not juries — would decide malpractice cases, awarding compensation from a set schedule. Plaintiffs' lawyers say that would undermine the constitutional right to trial by jury. But proponents say it would bring predictability, resulting in lower malpractice insurance rates for doctors.
"Health courts offer much more protection for fearful physicians than caps because you are unlikely to get a crazy verdict when you have an expert judge," said lawyer Philip Howard, founder of Common Good, a nonprofit group that advocates for changes in the legal system. The money Obama seeks could go far, he added, estimating it would cost $5 million to $7 million for a midsize state to set up health courts.
Speaking for trial lawyers, Gibson Vance, president of the American Association for Justice, called the idea "bad policy and bad for patients."
Obama's proposal also got a cool reception Tuesday from congressional Republicans, who feel he has a record of promising more on malpractice than he delivers. Obama first indicated an interest in the issue during the marathon debate over his health care law. But all that actually wound up in the law was $25 million in grants to study the problem and potential solutions.
It's different this time, administration officials said. The new proposal calls for ten times more money, and the grants would be used to change laws, not conduct more studies. Nonetheless, House Republicans are moving ahead with legislation to impose caps on jury awards.
The cost of defensive medicine is difficult to estimate, but conservative estimates start at around $50 billion a year. Obama's debt commission estimated its recommendations could save government programs $17 billion through 2020, calling for an aggressive effort to rewrite malpractice laws. Obama's budget, however, does not claim any savings from the new proposal.
Other malpractice reforms that could be funded under Obama's grant proposal include:
— Creating a legal defense for doctors, hospitals and other providers who follow guidelines for best clinical practices and use electronic medical records. So-called "safe harbor" laws establish the presumption that by adhering to high standards, doctors are not behaving in a negligent manner.
— Programs that require hospitals and doctors to disclose mistakes early, offer an apology and compensation, and also agree to make changes to protect other patients from being harmed in the same way. If the patient's family still wants to go to court, the provider's apology could not be used as evidence of liability. Such programs have been shown to reduce litigation.
Tea Party Member Says Malpractice Damage Caps Violate Constitution
February 10, 2011
side note: Wow! Here is an interesting case where the Tea Party philosophy clashes with the Republican agenda. The HEALTH Act (proposed federal tort reform) was set to be "marked up" yesterday by the House Judicial Committee, but had to be postponed because Rep. Ted Poe (R-Texas), a member of the Tea Party Caucus, said that it did not pass Constitutional muster.
From The Hill's Healthwatch blog:
Tea Party divide sidetracks tort reform: Rep. Ted Poe (R-Texas), a member of the Tea Party Caucus, said a Republican member's bill that would impose a cap on medical malpractice damages violates the Constitution. The House Judiciary Committee delayed markup of the tort reform bill until next week to consider whether the legislation would clash with state constitutions that forbid medical malpractice caps.
see The Hill's Healthwatch blog
Wisconsin State Government Flips to Republican Control, Tort Reform Takes Center Stage in New Legislative Agenda
February 7, 2011
side note: Here is the lead story in the February 2011 issue of Medical Liability Monitor. MLM is a must-read for those in the medical professional liability insurance industry.
Wisconsin could be the best barometer of a reshaped political landscape following the Nov. 2, 2010, elections—the only state in the union where both legislative houses and the governor’s office flipped from Democratic to Republican control. Think of it as a petri dish of reclaimed conservative influence upon government.
The day after his inauguration, newly minted Gov. Scott Walker convened the Wisconsin Legislature in a special session to discuss five bills intended to create a more business-friendly environment, one of which—the Health Care Quality Improvement Act (HCQI)—contains medical liability tort reforms.
With a 19-14 majority in the Wisconsin Senate and a 60-38-1 edge in the Assembly, the state’s Republican legislators were able to quickly usher Gov. Walker’s agenda through with minimal difficulty.
According to Walker, the liability reforms will discourage plaintiffs from filing frivolous claims, cap non-economic damages for medical malpractice, improve rules of evidence, protect best practices peer review information from being subpoenaed and raise the standards for qualifying expert testimony.
“Improving our state’s legal climate is important to creating an environment that allows the private sector to create jobs,” Walker said. “The lawsuit reform package passed by the legislature will bring much needed reforms to our legal system, so we are no longer known as the ‘Alabama of the North.’”
Much of the recently passed legislation is identical to reforms drafted in 2005 and ultimately vetoed by then-Gov. Jim Doyle, a Democrat. Those in Wisconsin’s Democratic Party and its usual allies contend that liability reform will not create a single job and will ultimately harm the state’s patients in the long run. Specific to their argument that the new legislation will actually harm Wisconsin patients is the section of the law that would prevent reports from state regulators that find problems at healthcare facilities as well as statements from employees of a healthcare provider from being admissable in court.
“The people in our communities who make up the courtroom juries are the same people our elected officials entrust to elect them,” said Mike End, president of the Wisconsin Association for Justice, the largest voluntary statewide plaintiff bar in Wisconsin. “With this bill our elected officials are saying that they know best—not the people and the judge in the courtroom—when it comes to determining who is at fault and who can testify.”
Proponents of the bill argue that the legislation will improve patient safety because one of the greatest challenges hospitals face is persuading doctors, nurses and other healthcare professionals to report errors. They assert that if these professionals know that an incident report will not be subpoenaed, they will be much more likely to report a medical error and provide information that could prevent future errors.
“The Health Care Quality Improvement Act will put Wisconsin at the forefront of the patient safety and quality improvement movement, leading to better outcomes for patients and better healthcare value,” said Stephen F. Brenton, president and CEO of the Wisconsin Hospital Association. “Under the proposal, healthcare providers will be able to study and improve practices, and importantly, share what they learn with others without fear of those findings being used against them in a lawsuit. These changes will bolster the work of organizations, including the state’s regulatory agencies, that work to improve patient safety and healthcare quality.”